Apple rebounds in China with first sales growth in two years

Apple recorded its first sales increase in China in two years, driven by rising demand for Mac computers and iPhones.

In the June quarter, the tech giant’s China revenue rose 4.4% to $15.4 billion, slightly ahead of the $15.2 billion projected by Wall Street analysts.

Chinese consumers drove double-digit growth in Apple’s Mac category by snapping up the MacBook Air, Mac Mini, and MacBook Pro.

CEO Tim Cook said the Air was China’s top-selling notebook, with the Mini leading among desktops.

Chief Financial Officer Kevan Parekh also stated the iPhone was a top performer in urban China, referencing data from Worldpanel.

Cook noted that government subsidies on smartphones and other electronic devices may have supported consumer demand.

In January, China extended its national trade-in program that initially targeted home appliances and vehicles, including personal electronics like smartphones, tablets, and smartwatches.

He also confirmed that new consumers in China were particularly drawn to the Mac, iPad, and watch, rather than its flagship iPhones.

He commented, “Across Mac, iPad, and Watch, most customers in mainland China were first-time buyers.

So lots of good things there.” Nevertheless, according to the IDC, Apple only saw a 1.3% drop in iPhone shipments in China last quarter, outperforming the broader market’s 4% decline.

Tariffs and trade-in programs shape Apple’s earnings outlook Apple’s overall revenue in the June quarter surged 9.6% to $94 billion , beating Bloomberg’s average of $89.3 billion.

The company also estimated that its revenue would rise by a mid- to high-single-digit percentage for the current quarter, topping the 3% growth anticipated by analysts.

According to Cook, the revenue growth in the June quarter was attributed to increased product sales in Greater China and other emerging markets.

He added that US tariffs drove up their spending costs, although they also boosted sales last quarter as consumers hurried to buy ahead of anticipated price hikes.

The Cupertino, California-based company had estimated a $900 million tariff burden with only modest revenue growth for the last quarter.

The company later reported that the tariffs cost them $800 million.

Apple, however, anticipates a bigger expenditure, about $1.1 billion in related expenses from the levies imposed for the current quarter.

Services and iPhones drive record revenue amid AI concerns Nonetheless, the services division continues to lead the company’s growth, posting a 13% year-over-year increase to $27.4 billion in the June quarter.

However, the unit is under increasing pressure.

Global regulators are targeting App Store practices that could diminish income from apps and subscriptions.

At the same time, a US Justice Department case may jeopardize its lucrative default search deal with Google, which earns the company about $20 billion annually.

The company also accrued over $44.6 billion from iPhone sales during the June quarter, topping estimates of $40.1 billion.

However, the firm is concerned that consumers could eventually gravitate toward screen-free AI devices, potentially undermining the iPhone’s dominance.

Cook remarked, “It’s difficult to see a world where iPhones are not living in it, and that doesn’t mean that we are not thinking about other things as well, but I think that the devices are likely to be complementary devices, not substitution.” Meanwhile, the iPhone maker made $8.05 billion from its Mac sales, surpassing Wall Street expectations of $7.3 billion.

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